The Economic Way of Thinking

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The Economic Way of Thinking develops the basic principles of micro- and macroeconomic analysis, and rigorously employs them as tools rather than ends unto themselves. This book introduces readers to a method of reasoning; to think like an economistteaching through example and application. It even teaches by showing learners how not to think, by exposing them to the errors implicit in much popular reasoning about economic events. Chapter topics include opportunity cost and the supply of goods, supply and demand, profit and loss, competition and monopoly, price searching, competition and government policy, the distribution of income, markets and government, the overall performance of economic systems, the supply of money, monetary and fiscal policies, national policies and international exchange, employment and unemployment, promoting economic growth, and the limitations of economics. For individuals seeking a deeper understanding of the effects of world events on the economy and vice versa.

Preface

xiii

The Economic Way of Thinking

1

(16)

Questions for Discussion

14

(3)

Efficiency, Exchange, and Comparative Advantage

17

(20)

Questions for Discussion

3l

(29)

An Appendix: Calculating Comparative Advantage in the Harry and Gus Story